Minimum wage and paternal leave addressed
05 Dec 2018
After much anticipation, President Cyril Ramaphosa has signed the National Minimum Wage Bill and the Labour Laws Amendment Bill into law.
These laws will bring about some major changes in South African labour law and will have significant consequences for employers and employees alike.
1. The new national minimum wage
The purpose of the National Minimum Wage Act No. 9 of 2018 (“NMWA”) is to advance economic development and social justice by:
- improving the wages of lowest paid workers;
- protecting workers from unreasonably low wages;
- preserving the value of the national minimum wage;
- promoting collective bargaining; and
- supporting economic policy.
The NMWA has set the national minimum wage rate at R20.00 for each ordinary hour worked for all workers except:
- farm workers;
- domestic workers;
- workers employed on an expanded public works programme; and
- workers who have concluded learnership agreements contemplated in the Skills Development Act No. 97 of 1998.
Alternative specific minimum wages have been set for these excluded categories of workers.
The payment of the national minimum wage cannot be waived, and it takes precedence over any contrary provision in any contract, collective agreement, sectoral determination or law, except a law amending the NMWA.
It is important to note that, in terms of section 17(4) of the NMWA, the application of the new minimum wage applies retrospectively as of 1 May 2017. Consequently, employers who have been paying less than the new national minimum wage since 1 May 2017 will be required to back pay their workers. (Note: The enforceability of this provision is questionable, and will no doubt be subject to challenge.)
However, where an employer cannot afford to pay their workers the new national minimum wage and to avoid having to retrench workers, an employer or an employers’ organisation may, in the prescribed manner and form, apply for an exemption.
A National Minimum Wage Commission (the “Commission”) will also be established. The Commission will be required to conduct annual reviews of the national minimum wage and make recommendations to the Minister of Labour on any annual adjustments.
Calculation of wage
The calculation of a wage for the purposes of the NMWA is the amount payable in money for ordinary hours of work.
The amount excludes:
- any payment made to enable a worker to work including any transport, equipment, tool, food or accommodation allowance;
- any payment in kind including board or accommodation;
- gratuities including bonuses, tips or gifts; and
- any other prescribed category of payment.
Any deduction made from the remuneration of a worker must be in accordance with the Basic Conditions of Employment Act No. 75 of 1997 (“BCEA”), provided that a deduction does not exceed one quarter of a worker’s remuneration.
2. Amendment to the conditions of parental leave
The Labour Laws Amendment Bill (“LLAB”) is a Private Member’s Bill that was drafted in line with African Christian Democratic Party’s policy on family values, the Green Paper on Family and as a result of appeals made by fathers who felt strongly that provision should be made in law for ‘‘paternity leave’’.
The BCEA has been amended to provide for parental leave, adoption leave and, in the case of a surrogate motherhood agreement, commissioning parental leave.
The following leave conditions, inter alia, have been inserted by the LLAB:
- An employee, who is a parent of a child, is entitled to at least ten consecutive days parental leave;
- An employee who is an adoptive parent of a child who is younger than two years is entitled to adoption leave of ten weeks consecutively. If there are two adoptive parents, one of the employees is entitled to adoption leave and the other employee is entitled to parental leave; and
- An employee who is a commissioning parent in a surrogate motherhood agreement is entitled to commissioning parental leave of ten weeks consecutively. If there are two commissioning parents, one of the employees is entitled to commissioning parental leave and the other employee is entitled to parental leave.
The LLAB further provides for the payment of parental benefits, adoption benefits and commissioning parental benefits from the Unemployment Insurance Fund.
If you would like a more in-depth analysis or legal advice on the recent labour law amendments, please do not hesitate to contact us.
Credit: Richard Pemberton – Specialist Consultant
- National Minimum Wage – New territory for South Africa and the CCMA
- The challenge of setting a new national minimum wage
- Part 2: Paternity leave a step closer to becoming law